JetBlue and Spirit believe proposed merger promotes competition

MIRAMAR – Today JetBlue Airways Corporation (“JetBlue”) (NASDAQ: JBLU) and Spirit Airlines, Inc. (“Spirit”) (NYSE: SAVE) responded to the filed complaint By the US Department of Justice (“DOJ”) trying to block the merger:

JetBlue and Spirit will continue to advance our plan to create an attractive national competitor to the Big Four airlines, which control about 80% of the market after years of industry consolidation approved by the Department of Justice itself. Together, we will expand JetBlue’s unique offering, where customers don’t have to choose between a low fare and a great experience to increase national competition.

JetBlue has proven its ability to make traditional carriers responsive with JetBlue’s low fares and superior service. The Justice Department said that “in the face of consolidation, JetBlue has become an important and ongoing source of competition” and that “JetBlue’s reputation for cutting fares is so well known in the aviation industry that it has been dubbed: The JetBlue Effect.” .'” (A).

competitive market

This was stated by JetBlue CEO Robin Hayes.“Customers deserve a competitive airline market, and we will continue this merger to ensure they get it, continuing to destroy legacy airlines with low fares and award-winning service that even the Department of Justice has welcomed. We believe the DOJ has misunderstood the law and is missing the point that this merger will create a national low-fare, high-quality competitor to the Big Four carriers, which—through their own DOJ-approved mergers—control about 80 carriers. % of the US market. There is too much at stake for the Department of Justice to stop us from bringing the benefits of JetBlue to more customers in more markets.”

Benefits for consumers

Spirit CEO Ted Christie said: “We disagree with the Justice Department’s decision to try to block a proposed merger that would benefit consumers and employees. We will strongly defend our position that the combination of JetBlue and Spirit will be a game changer for customers across the country, creating the most attractive low-fare national competitors for dominant US carriers. Together, we are determined to democratize domestic traveler flights, a goal we believe is worthy of government support.”

The ULCC market will continue to thrive as JetBlue brings the much-loved, award-winning experience to Spirit aircraft

Customers will benefit from both more JetBlue services and the continued expansion of Ultra Low Cost Carriers (ULCC). JetBlue fights for all customers, and its Blue Basic plan offers customers a competitive low cost option to save more money. Additionally, as many of the Spirit aircraft will continue to fly in their current configuration during the post-deal upgrade process, there will be no short-term capacity changes.

As JetBlue upgrades the Spirit’s aircraft with a customer focus (for example, adding more legroom and other onboard amenities), the combined airline will also be able to significantly increase aircraft usage, offsetting the removal of seats during the upgrade by increasing the number of flights. This will lead to more Blue Basic seats and, combined with the rapid growth of ULCC, will create a more competitive environment and continued access for the most price sensitive customers.

Hayes continued, “Giving JetBlue increased legroom and complimentary amenities on Spirit aircraft is a big win for consumers and we can make up for any loss of seats with more flights and growth in ULCC. You don’t have to choose between low fares and a great experience, which is why the government should celebrate the expansion of JetBlue’s low fares and customer favorites like the biggest legroom on a bus, free Wi-Fi, direct TV in seatbacks and free snacks. to the fleet of the Spirit.

Settlement resolves Florida concerns; Provides new jobs and additional flights

We are very pleased to reach an agreement with the State of Florida to support the merger of JetBlue and Spirit. The agreement ensures the merger will create new jobs in Florida as JetBlue adds its low-cost flights to airports across the state.

• The combination of JetBlue and Spirit will increase capacity by at least 50% at both Fort Lauderdale and Orlando, and increase the combined capacity at all other Florida airports currently operating JetBlue or Spirit by at least 50%.
• These commitments will bring hundreds of new daily flights to Florida, additional frequencies in more than 35 markets, and service to nearly 50 new routes currently not served by either JetBlue or Spirit.
• JetBlue will create at least 1,000 new jobs in South Florida, at least 500 new jobs in the Orlando region, and at least 500 new jobs to support JetBlue’s expanded airport operations across Florida.
• JetBlue will extend its “no layoffs” policy and increase compensation to members of the Spirit team.
• JetBlue will maintain all Florida facilities currently operated by JetBlue or Spirit, including Spirit’s planned future Dania Beach headquarters, at or above their current or planned occupancy levels for a minimum of five years following the merger.

Hayes said: “We are grateful to Florida Attorney General Moody for his willingness to acknowledge the opportunity for consumers and negotiate a fair settlement. Unfortunately, the federal government and other states want to block the benefits of this merger, including the significant job growth and increased available flights that this combination opens up.”

Actually everything JetBlue crew members and Spirit team members would benefit from a larger and more competitive airline:

• After the merger, the airline will have more aircraft, a larger network, more jobs and more opportunities.
• JetBlue has made commitments to protect crew and crew members, including extending its 23-year no-holiday commitment, committing not to move, and providing warranties for seniority protection.
• By bringing airlines together, crew members and team members will be able to open collective bargaining agreements and discuss topics that are important to them, including pay scales and benefits. JetBlue aims to complete this process as quickly as possible so that the airline can obtain a single operating certificate and begin operating as a single airline.

The benefits of the JetBlue-Spirit merger are clear and widely supported

The benefits of the combination of JetBlue and Spirit have been widely recognized by consumer advocates, labor leaders, legislators, local government officials, industry experts and academics. In addition, thousands of JetBlue crew members and Spirit Team employees sent letters of support to the US Department of Justice and the US Department of Transportation. We are confident that the court will also recognize the merits of our case.

The rationale for the JetBlue-Spirit combination is clear:

• JetBlue is 3 times more efficient Spirit lowers competitors’ tariffs. JetBlue’s unique combination of low fares and excellent service is a competitive force that keeps legacy carriers on their toes and drives lower fares.
• JetBlue’s award-winning customer experience will attract more customers. Passengers love JetBlue for its award-winning on-board service as well as the largest legroom on a bus (b); free and fast broadband Internet Fly-Fi (c); free and unlimited branded snacks and soft drinks; and free DIRECTV® programming live at every seat.
• The combination will open up long-term opportunities to add more destinations and routes that would not otherwise be possible.. This new flight will bring more choice and low-fare competition to more cities and older transport hubs.
• Together, JetBlue and Spirit will still be far smaller than any Big Four carrier. Even as the fifth largest carrier, the combined market share of JetBlue and Spirit will be only 9% compared to 16-24% for each of the top four airlines.
• JetBlue and Spirit primarily compete with other carriers, not with each other. According to an independent source published in April 2022 and confirmed by more recent data, JetBlue and Spirit only overlap on 11% or less of the non-stop routes they both fly.
• JetBlue has offered unprecedented upfront sales to fuel ULCC’s growth. To address potential concerns about a limited overlap between JetBlue and Spirit, JetBlue has already made prior commitments to sell all Spirit assets in Boston and New York, as well as five gates and related assets in Fort Lauderdale, significantly reducing and an already small number of non-stop routes.
• JetBlue Expands Sustainability Leadership. JetBlue expects to extend its industry-leading environmental commitment to the combined airline, including its goal of achieving zero carbon emissions by 2040, ten years ahead of the goal of the U.S. aviation industry as a whole. As part of this effort, JetBlue will leverage the combined company’s order book to accelerate the fleet’s transition to next-generation fuel-efficient aircraft and ensure regular use of sustainable aviation fuel in Spirit’s west coast operations after the shutdown.